CMA Concludes Veolia Must Sell 3 Businesses After Merger With Suez In UK

Following an in-depth investigation of the merger of Veolia (VE) and Suez SA in the UK, the UK Competition and Markets Authority or CMA has concluded that Veolia must sell most of the operations it took over in the UK when it acquired Suez.

In its final report, the CMA said the merger would lead to competition concerns in 5 waste markets and 2 water treatment markets.

The agency noted that Veolia and Suez were 2 of the largest suppliers of waste management services in the UK prior to the merger.

The agency required Veolia to sell 3 business, such as Suez’s UK waste management services businesses, Suez’s UK industrial water operation and maintenance services business; and Veolia’s European mobile water services business.

These businesses make up almost all of the overlap between Veolia’s and Suez’s competing operations in the UK.

Responding to the provisional findings of the Phase 2 inquiry, Veolia said that it would sell the UK Suez waste business.

The CMA will determine the conditions of the sale, as well as the sales of the 2 water services businesses.

The agency said it will need to approve the purchasers of each business before the completion of each sale.

Stuart McIntosh, Chair of the CMA inquiry group, said, “Local authority budgets are already under strain, and this deal is likely to lead to them paying more and receiving a lower-quality service. The negative impact would have ultimately fallen on taxpayers at a time when they are feeling the pressure of the cost of living crisis.”

The CMA launched an investigation into the deal between Veolia and Suez in October 2021. The transaction was referred for an in-depth Phase 2 review, which is led by an independent inquiry group, in December 2021.

The deal has been reviewed by a number of competition authorities across the world, and major divestments were also required in the EU and in Australia.

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